December 2010 Manufacturing PMIs: Expansion accelerating!

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The manufacturing PMIs for December indicate that the rate of expansion in the global manufacturing sector is accelerating. Only France, India, China, Greece and Australia reported weaker growth. The manufacturing sectors in most countries except Australia, Japan and Greece continue to expand.

In the Eurozone the manufacturing sectors in France and Germany continue to be robust while Ireland, Italy and Spain surprised on the upside. The manufacturing sector in the U.K. accelerated to a very buoyant 58.3.

In Asia Japan’s PMI improved slightly but the manufacturing sector remains in the grip of a recession. The acceleration in the tigers in Asia – China and India – has moderated somewhat while growth in Taiwan is accelerating. Emerging Europe continues be robust.

Manufacturing PMI

Trend

CountryDec-10Nov-10
US*****57.056.6Expansion accelerated, robust
Eurozone*57.155.3Expansion accelerated, robust
Germany*60.758.1Expansion accelerated, robust
France*57.257.9Softened a tad, robust expansion
Greece*43.143.9Contraction intensified
Italy*54.752.0Expansion accelerated
Spain*51.550.0Expanding again
Ireland*52.251.2Expansion accelerated
U.K.*58.358.0Expansion accelerated, robust
Japan*48.347.3Contracting at lower rate
Australia*46.3 47.6 Contraction intensified
Emerging Economies
Brazil*52.449.9Expanding again
China**53.955.2Expansion softened
Czech*58.457.3Expansion accelerated, robust
Poland*56.355.9Expansion accelerated, robust
Turkey*56.456.4Robust
India*56.758.4Softened a tad, robust expansion
Russia*53.551.1Expansion accelerated
Taiwan*54.751.7Expansion accelerated
Global****54.954.0Expansion accelerated

Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****.

Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****

It is apparent that the global manufacturing PMI has bottomed and an upward trend is likely to be maintained in coming months.

Sources: Markit; Li & Fung; Plexus Asset Management; ISM.

Growth in global industrial production on a year-ago basis is likely to gain momentum in the first quarter of this year.

Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****; I-Net Bridge.

Industrial metal prices will continue to be strongly supported by the acceleration of the global manufacturing sector.

Sources: Markit*;Li & Fung**; Plexus Asset Management****;ISM*****; I-Net Bridge.

The numbers surprised me on the upside and made me feel a tad less sceptical regarding the outlook for the global economy. But I continue to fret about how things will pan out in China given the stricter monetary policies of the PBoC and the potential contagion of the debt crisis in the Eurozone.

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